US changes rules on tax credits for electric cars to cover American-made only Changes to US tax credits for buyers of electric vehicles and hybrids go into effect tomorrow, and the list of qualifying vehicles is quite short: only six US-based companies are present, and several manufacturers that previously qualified have even been cut under the strict new requirements. In a table shared by the …
Historically, protectionist tariffs have worked really well.
Admittedly, targetting a specific sector like battery manufacturing - currently dominated by China - is unlikely to cast the USA into a 1930s-style Depression, whilst also addressing geo-political concerns. Of course giving high-earners subsidies to buy $80k cars is also of dubious economic value - in terms of the overall US economy, they'd be better off funding urban redevelopment and public transit in urban areas - which benefits non-drivers and the poor, not just wealthy drivers.
Accurately identifying where prudent diversification (establishing US-based resource extraction and manufacturing for industries currently dominated by China) ends and protectionism begins is something that will probably only be done accurately in hindsight. So in the meantime, probably a good thing for them to be tightly targetted and limited in scope. But these measures are probably misplaced to start with.
Seriously, is there such a thing?
I wondered the same. Aren't a lot of the 'US' cars made in Mexico? Technically I guess that still means they're made in America. But phase 2 of the proposal attempts to drive changes and restart lithium & copper mining in the US. I'm sure there'll be no objections to this.
Meanwhile, the EPA's imposing new emissions standards to force ICEs off the roads faster than the state of many US roads will. Sales of EVs have been falling, or at the least slowing, and the US still has the challenge of providing a rational and affordable energy infrastructure to fuel EVs, and power the industries it's trying to bring back home.
Somehow, all that expenditure is going to reduce inflation, but then words don't have the same meanings as they used to.
And that is the fundamental problem. US car makers manufacturing models for the US market have not understood that things changed.
Imports offered far better value, options and quality.
The solution is typical, provide incentives to tempt people to buy something they don't want because it is not as good as the competition.
I wonder just how many of the critical components are actually made in the US?
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